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Section 1: 8-K (8-K)

Document
false0001409970 0001409970 2020-03-30 2020-03-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 30, 2020
LendingClub Corporation
(Exact name of registrant as specified in its charter)
 
Commission File Number: 001-36771
Delaware
51-0605731
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
595 Market Street, Suite 200,
 
 
San Francisco,
CA
94105
 
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (415) 632-5600
Former name or former address, if changed since last report: N/A
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, par value $0.01 per share
LC
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.





Item 8.01
 
Other Events

Effective March 30, 2020, interest rates on the LendingClub Corporation (“LendingClub”) platform have been updated to reflect an increase of between 2.0% and 4.0% for loan grades A1 – D5.

In addition, LendingClub expects to publish a blog post on March 30, 2020, entitled “Investor Update: Federal Stimulus Package & Help for Borrowers” (the “Blog Post”). A copy of the Blog Post is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Set forth below is a chart showing the interest rates assigned to standard program loans for each of the LendingClub loan grades.

Loan Grade
 
Interest Rate
A1
 
8.46%
A2
 
9.02%
A3
 
9.56%
A4
 
10.19%
A5
 
10.81%
B1
 
13.33%
B2
 
14.02%
B3
 
14.71%
B4
 
15.40%
B5
 
16.08%
C1
 
17.30%
C2
 
18.24%
C3
 
19.12%
C4
 
19.95%
C5
 
20.74%
D1
 
22.62%
D2
 
24.55%
D3
 
27.05%
D4
 
29.65%
D5
 
30.99%


Item 9.01
 
Financial Statements and Exhibits
(d)
 
Exhibits
Exhibit
Number
 
Exhibit Title or Description
 
104
 
Cover Page Interactive Data File
(Cover page XBRL tags are embedded within the Inline XBRL document)






SIGNATURE(S)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
LendingClub Corporation
Date:
March 30, 2020
By:
/s/ Brandon Pace
 
 
 
Brandon Pace
 
 
 
General Counsel and Corporate Secretary
 
 
 
(duly authorized officer)



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

EXHIBIT 99.1


Investor Update: Federal Stimulus Package & Help for Borrowers

Over the past several weeks we’ve updated our platform investors on what we’ve done and what we’re continuing to do to combat the effects of the coronavirus (COVID-19) pandemic on our investors’ portfolios. We continue to take immediate, proactive and temporary action and may continue to adjust as needed while we navigate the rapidly changing environment.

The environment remains fluid: The federal government enacted a $2.2T stimulus plan on March 27 that is unprecedented in size and speed. It includes expanded unemployment benefits, a cash infusion to most individuals, aid for small businesses, and Tax Day deferral (among other things).

The scope of the government’s response appears to reflect the market’s expectation that the spike in unemployment will be unprecedented and the recovery will be unique as well. Like other fintech and financial services companies, we are assessing the impact to our platform and the market, including the potential impact of aid on affected borrowers, but it is difficult to estimate with any precision. For example, the government’s relief in 2020 is larger than during the Great Recession of 2008, but perhaps more important, it appears intended to provide aid more quickly: it took more than 6 months for consumers to experience the benefits of the 2008 relief, while the government is anticipating that consumers in this case should experience benefits in the next 2-4 weeks.

We’re committed to our members’ financial success and are doing everything we can to help them stay on track throughout this period. We are waiving late fees starting April 1st through May 31st. We’ve rapidly added new collections and servicing capabilities, ranging from remote-work kits for our customer service teams, to tripling the number of people available to help over the phone, to adding new hardship plans (which enable eligible borrowers flexibility to make interest-only payments for a few months). Consistent with best practices and regulatory guidance, we have also designed a hardship plan specifically for this situation that allows eligible borrowers to easily skip up to two monthly payments and launched a self-service tool last week to allow people to apply for a hardship plan online. To date, as a percentage of our portfolio, the number of borrowers requesting hardship plans has been relatively small at less than 2% of total loans outstanding. The majority of those calling in are in current status (meaning they haven’t missed any payments to date and are proactively calling to let us know they think they’ll be impacted). We expect to continue to develop plans to help our borrowers during this difficult time.

There will be a temporary impact on investors’ cash flow due to borrowers enrolling in these programs, but it’s too early to estimate the ultimate effect on investor returns given the uncertain impacts of several factors, such as the total number of Americans who ultimately experience income dislocations as well as the potentially positive impact of the historic government stimulus package.

In the meantime, we have taken fast and aggressive action with the aim of protecting our investors’ returns on new issuance. We reduced approval rates for certain higher-risk borrower populations and increased income and employment verification requirements. Today, we announced increased interest rates for new borrowers ranging from 2% to 4% depending on loan grade. As a reminder, as we focus on borrowers with higher credit quality, investors may see fewer grade C and D loans available on the platform. Individual investors who are overweight those grades should consider the effects of cash drag on their portfolio and whether or not to reallocate now in line with their investment objectives.

These are difficult times for many people. We hear the pain in our borrowers’ voices when they call and are doing everything we can to help. We will continue to keep our investors posted and encourage them to reach out to us at [email protected] with any questions.

Safe Harbor Statement

Some of the statements above, including statements regarding our ability to effectuate and the effectiveness of changes in strategy, loan performance, platform returns, borrower and investor demand, our ability to add servicing and payment plan capabilities, the impact of government efforts and stimulus in response to the




EXHIBIT 99.1

coronavirus, , our ability to successfully navigate the current economic climate, the performance of the company and the impact of the coronavirus are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “will,” “would” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include the impact of global economic, political, market, health and social events or conditions, including the impact of the coronavirus, and those factors set forth in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, as well as our subsequent reports on Form 10-Q and 10-K each as filed with the Securities and Exchange Commission. We may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Information in this blog post is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.



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